The Zacks Analyst Blog Highlights: Google, HSBC Holdings, Goldman Sachs Group,
Citigroup and SunTrust Banks
CHICAGO, Jan. 23, 2013
CHICAGO, Jan. 23, 2013 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Google Inc. (Nasdaq:GOOG), HSBC
Holdings plc (NYSE:HBC), The Goldman Sachs Group, Inc. (NYSE:GS), Citigroup,
Inc. (NYSE:C) and SunTrust Banks, Inc. (NYSE:STI).
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Here are highlights from Tuesday's Analyst Blog:
Google Revs Up 36% Year Over Year
Search engine titan Google Inc. (Nasdaq:GOOG) reported earnings after the
bell, and while the results may have not been surprising, they are
nevertheless fairly astonishing. The company brought in $14.42 billion over
the past three months for a headline EPS read of $10.65 per share.
At Zacks, we account for stock-based compensation (as well as a 34-cent
restructuring charge in the quarter), so our EPS number comes to $9.02. That's
still notably higher than the $8.61 expected by the 12 analysts covering
Google shares. Analysts also expected GOOG to bring in $12.42 billion for the
quarter, so it beat on the top-line as well.
Each quarter, Google's reporting numbers create headaches for those trying to
decipher their meaning. Not that there's anything tricky afoot here, but the
nature of Google's different businesses lend the company's earnings reports to
be less than obvious and straightforward. Long-time owners of GOOG shares can
likely attest to the head-scratching that occurs when CEO Larry Page & Co. put
their quarterly numbers out.
Contrary to what some casual observers may think, Google is anything but a
lock to beat estimates quarter after quarter. In fact, over the previous 4
quarters, Google averages a negative EPS surprise of 4.91%, and the company
missed big (17%) in the September quarter.
Analysts had been extremely dormant ahead of the company's earnings report,
with no one adjusting estimates over the past month, and only 1 of 12
upgrading expectations over the past 60 days.
HSBC Settles Foreclosure Claims
Last week, HSBC Holdings plc (NYSE:HBC) became the latest bank to announce a
foreclosure settlement deal with the Office of the Comptroller of the Currency
(OCC) and other U.S. banking regulators. The company has agreed to pay $249
million to stop review of wrongful foreclosures in the U.S.
Out of the total amount, $96 million will be utilized for direct payments to
eligible borrowers, while $153 million will be used for providing relief to
troubled homeowners through principal reductions and loan modifications. The
deal will enable nearly 112,000 homeowners, whose property was wrongly
foreclosed in 2009–2010 by HSBC, to get cash compensation, ranging from a few
hundred dollars to a maximum of $125,000.
Additionally, under the terms of the deal, the process initiated by the OCC in
2011 – to review all the borrowers' files that were wrongly foreclosed in
2009-2010 – would end. Under that process, the banks were required to hire
independent consultants to go through the loan files and look for any faulty
Earlier in the same week, The Goldman Sachs Group, Inc. (NYSE:GS) and Morgan
Stanley agreed to pay $557 million in aggregate to settle similar charges.
Moreover, in early January, 10 banks, including Citigroup, Inc. (NYSE:C),
BofA, JPMorgan, Wells Fargo and SunTrust Banks, Inc. (NYSE:STI), agreed to pay
a total of $8.5 billion.
As a result of the deal, HSBC is anticipated to record a pre-tax charge of $96
million in the fourth quarter of 2012, while the remaining amount is expected
to be covered from the existing reserves.
Though the settlement is expected to marginally dent HSBC's fourth-quarter
results, in the long run it will be a big relief. Further, the distressed
homeowners would also be benefited. We are hopeful that like the earlier
foreclosure settlement deal, this one would also be a decisive step in
restoring confidence in businesses and rejuvenating the sagging housing
HSBC currently retains a Zacks Rank #3 (Hold).
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